Just 4% of the hotels in Japan’s major cities have rooms that can accommodate three or more guests. Meanwhile, approximately half of the foreign travelers visiting Japan are coming in groups of three or more. Only a small number of hotel developers have picked up on this mismatch.
One of those is Nippon Steel Kowa Real Estate (NSKRE) which just opened a new brand of hotel in Ueno that caters to larger groups of guests and for longer periods of stay. The &Here Tokyo Ueno hotel opened on March 15. It’s located on the southern side of Ueno Park on a site that was previously home to an older hotel. NSKRE acquired the leasehold rights to the site a few years ago and had originally planned to develop a condo. But, with the creation of the &Here brand and the expected recovery in the inbound tourism market, developing a hotel made more sense.
The 145 guest rooms can accommodate between two to six guests. Most rooms are furnished with dining tables, mini kitchens, fridges, microwaves, utensils, sofas, and bathrooms equivalent in size to those found in apartments. Room sizes range from 21 to 73 sqm (226 ~ 785 sq.ft), with around 70% of the rooms in the 40 sqm range. There’s a lounge and cafe space along with share-office to cater to those on workcations. The 14th floor has a large ‘rotenburo’ open-air bath.
The 40 sqm rooms are expected to range from 40,000 ~ 60,000 Yen per night, with the 73 sqm room starting from 150,000 Yen a night. Reservations opened up last summer and 80% have been made by inbound tourists. Of those, 60% are from Hong Kong and Taiwan, followed by the US, Korea and China. The average booking is for 3 to 4 nights. The operating ratio for the fist year is expected to be around 80%.
NSKRE embarked on an aggressive acquisition spree during the pandemic, acquiring enough development sites to build nine hotels and around 800 rooms. The company is planning to spend between 40 to 50 billion Yen in hotel development over the next five years with additional hotels planned in Shinjuku and Osaka.
Source: NSKRE Press Release, March 13, 2024.
